Assume That a Purchase Invoice for $1,000 Was Appropriately Recorded

question 137

Multiple Choice

Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2016,but the inventory was excluded in error during the ending inventory count.What impact will this have on fiscal 2017 financial reporting?

• A)Gross margin is understated by $1,000.
• B)Cost of sales is overstated by $1,000.
• C)Ending inventory is not affected by the prior year inventory counting error.
• D)Beginning inventory is overstated by $1,000.

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